Rockford Mayor Larry Morrissey: Landfill owner overcharging city

ROCKFORD — City officials are claiming Rock River Environmental Services, the city’s trash hauler and landfill operator, has been overcharging the city to dump at Winnebago Landfill.

Mayor Larry Morrissey couldn’t say exactly how much money is at stake but wants to see the company’s records to find out. John Lichty, president and CEO of Rock River Environmental Services, said he won’t reveal what the company charges private haulers to dump in the landfill. But he said it has met its obligation to give Rockford the lowest dumping rates among any of its municipal customers.

The dispute started in the months leading up to a Nov. 12 session in which Rockford aldermen voted 12-1 to award Rock River a new seven-year contract worth $56.6 million to continue hauling and disposing the city’s waste. That contract begins after the firm’s current 10-year deal expires on Dec. 31. Rock River won the contract even though it wasn’t the low bidder.

At issue is a contract provision signed in 2003 that guarantees the city a “favored rate.” It promises Rockford that if the landfill charges “any customer other than the city” a lower rate for “similar municipal wastes,” the Forest City would automatically get the lower rate, too.

That hasn’t happened, Morrissey said.

“We believe that they have given out a more competitive rate with someone else,” he said.

That “someone else” is a private company or companies that are hauling transferred waste out of the Chicago suburbs.

Since the landfill is more than an hour drive from the suburbs, the waste is typically picked up along the curb and taken to a nearby transfer station where it sometimes gets compacted, Legal Director Patrick Hayes said.

The transferred waste is then loaded into large trucks and driven to the landfill.

“Our position is that the cost for that tonnage is less than the rate we’re rate paying,” Hayes said.

The city believes the transfer waste is charged a lower rate because of the volume of it coming out of the suburbs and the fact that the landfill hasn’t let city officials see the prices.

Morrissey and his administration want two things: to inspect the landfill’s prices and to be reimbursed the difference if any customers are paying a lower rate than the city.

Lichty declined to release rate information to the Register Star for the landfill’s private customers.

“We’re a private company and that is very confidential information,” he said. “But we’ve been transparent with the city about all of our other municipal customers.”

Rock River Environmental Services changed the language from its 1995 contract with the city during the 2003 contract renewal to make sure it was clear that the favored rate only applied to other municipal customers, Lichty said.

The city agreed to change the sentence from, “the city will be charged the lowest tonnage rate for any customer,” to the revised, “the city will be charged the lowest tonnage rate for any customer for similar municipal wastes.”

“We added that so there would be no confusion, so it would be unmistakable,” Lichty said.

The city gets, by a wide margin, the lowest dumping rates among any municipality, he said.

If the two sides can’t resolve the dispute, they could take the matter to a third-party arbitrator, whose ruling would be binding.

The new contract includes no favored-rate provision. Rock River will charge the city per home served rather than per ton disposed.

Rock River won the contract over Advanced Disposal, which offered to do the work for about $800,000 less — or 17 cents a month per home. But ultimately, the City Council decided to pay more to keep the company it knew.

Ald. Venita Hervey, D-5, cast the lone vote against the Rock River bid.

“Everybody kept touting local people and the local company,” Hervey said. “But if they’re local, why didn’t they treat us with the same respect?”

“It seems like when everyone screams, ‘Local, local, local,’ and ‘Regional, regional, regional,’ it always works to Rockford’s detriment. They only mean they want Rockford to give them something, but not to give Rockford the same consideration.”